No don't go in there, Daddy's working.
Jonathan: Welcome, welcome, welcome back to another edition of Daddy's Working Podcast. I am flipping the script on you again. I'm changing things up. I got bored of talking to myself and so, I'm inviting some friends on to the show to share their wisdom with you, their journeys with you, and to make my life much easier because I'm lazy A.F. So today, I've got with me Joe Lieber. What is up, bro?
Joe: What's up, brother? How you doing today?
Jonathan: Hey, I want to tell you something. You look sexy with those headphones and that mic. You look like you're ready to call a football game, brother.
Joe: Dude, I can barely work this equipment, man. But it's new to me - I'm going to figure it out. [0:01:00.4]
Jonathan: That's right. That's right. Challenge accepted, man. So I want to, you know what, before we get into intros because I have - I mean people probably want to know one or two things about you. Before we get into that, can you just tell our listeners what a strawberry is?
Joe: Oh, my goodness. We're going to do that, huh? We're really going to do that. Oh, geez, this is a rough one. So, okay, we'll do it. So, you know, they call me the ghettologist sometimes because I invest in, you know, some C and D-class, maybe F-class neighborhoods in my real estate investment business. So, I had to learn the secrets and the code of the ghetto. So, I had this problem where girls would be coming over to my apartment building, in the middle of night, and these johns would run out and they would - how do I say this, Jonathan being politically correct...
Jonathan: They would pay for services rendered… I don't know. [0:02:03.0]
Joe: Yeah, pay for services rendered. So these ladies of the evening…
Jonathan: There you go.
Joe: …are called strawberries and they will do sexual acts for small amounts of money. So I had to…
Jonathan: You're very specific. Yeah. When you said it to us at the table, it was like $2 to $4, and we're like, "What?!"
Joe: Yes. I think it is. Okay, so we'll get down to the… 2-4 American Dollars…
Jonathan: That's possible?
Joe: It is possible. So I had to get rid of this problem. I mean, these girls are coming over here every night, and I got the men running out of my apartment building and going to see these girls, so it's called a strawberry problem. So, I learned from other people in the building. They taught me how am I going to get rid of these girls, and I - you would think the easy things, right? Before I asked how to do it, I put up a light, right, a motion light. So I did that, and they would come over by the side of building and a light would turn on. Unfortunately, they'd throw a rock up at the light, break the bulb, and that did not work. [0:03:03.6]
So, I learned from a little bit older gentleman, here's what you have to do. He goes, "Go down to the hardware store and buy some ammonia, throw it all over the ground down there, and when they come at night, they're going to hit their knees and it's going to burn their eyes, and that will get rid of them. They'll stop coming." And I tell you what - he was right. It freaking worked, dude.
Joe: And that was it, man. It helped the problems. So never again.
Jonathan: There's so much to learn there. First of all, if you've got a strawberry problem, we just told you how to get rid of it, and second and more importantly, and the point that I think 90% of people will miss is that you can find mentorship in the strangest places. Right? You didn't know and a guy in the ghetto told you, here's how you get rid of it.
Joe: Exactly - he did. That was my mentor.
Jonathan: There you go. He was your mentor, and you find it in the oddest places. And so, speaking of mentorship - Joe, can you just tell us a little bit about your background and who you are so the listeners know who their mentor for today is? [0:04:10.2]
Joe: Yes. So I have been in the real estate business for 22 years, full time. I've been through every part of this business, man, from landlording to flipping to wholesaling, rehabbing, multifamily, the brokerage business - pretty much every aspect of it. So everything I talk about here, I have learned through the school of hard knocks. I didn’t read this stuff in a book last night. I live everything I talk about.
Jonathan: That is so rare nowadays, where everybody is an expert and nobody has experience. So that's one of the reasons why you're here. Another selfish reason that you're here is that I, too, own ghetto rentals, and so I'm like, yeah, we should talk about some…So let's get into this. How - you said you've been to every part of the business. [0:05:00.3]
And so how do you end up - like, most people don’t want to be in C and D rentals. Like, why are you drawn to that?
Joe: You know, it is extremely lucrative and some of the connotations to the people think about it aren't necessarily true. Some of these C and D-class neighborhoods, I mean, people live there. Right? It's not unusual to find people that are owner occupied, people that have been living in these homes for literally 20, 30, 40, 50 years. I just purchased a home, in a D-class neighborhood, where it's been the same owner since 1959.
Joe: In that little pocket right there, there's all owner-occupied people, although it's a D-class neighborhood. It's really nice. It's a nice little pocket right there, so, and the house is super cheap, right. And the rents are going to be, you know, obnoxious, especially here in this Midwest - I'm in Cleveland, Ohio - so especially one of these Midwest markets right now. The ROIs are just off the charts and it really - you know, people want to, people really just want a nice, safe place to call home. And that's really what I specialize in offering. [0:06:06.5]
Jonathan: Nice, safe place to call home. Do you advertise that it's a nice, safe place?
Joe: Well, you know, people know the neighborhoods better than I do sometimes, so it's familiarity. Right? When you're familiar with something, that's where you migrate to. I'll give an example of this. Right? So like 20 years ago, I was flipping a house in the ghetto and there was a McDonalds down there, and like, I was like hell no, I'm never going to that McDonalds down there. Right? I was like, I'm just not going to do it. Right? I think it's dirty. Whatever I want to think. But after like going to the house 25 and 30 times, I was like, eh, it's not so bad; let me just stop in there and get a Pepsi. And then you're like, well, I'll just get fries and a Pepsi. Before you know it, like you have a Big Mac and a Pepsi. Right? And you're like hanging out, "Hey, good to see you again!" And it's like it was familiar to me. So, that's how like these neighborhoods are. Like that's where they want to be. It might be, you know, not the most desirable place that I want to go, but to most people, that's comfort, that's home; that's where they want to be. [0:07:01.0]
If I can provide a quality product there and give them security, you know, with giving them things like, and now we can provide not only like alarm systems and motion lights, we can provide cameras now. Like all kinds of cool stuff. Everybody has wifi. Everyone has a cell phone, so you can take these homes and really, really like give back, so to speak, to the community.
Jonathan: Now, I had this interesting idea and you're the perfect person to speak with about it. So we have some apartments and then we have some single families over in the hood. Our hood is Pine Hills over here and they call it Crime Hills, and I have found that my crappy little Pine Hills house is pulling as much rent as a home we have in CastLieberry that's super popular. Are you seeing something similar because you said it's super profitable. How's that play out?
Joe: Absolutely. You're absolutely right. In a lot of cases, I get more money in rent in these lower income areas than I do in a C or even B minus neighborhood. It's really crazy. Lie, let me try to throw some - let me throw you some numbers. Is that okay, to like give you some real life examples? [0:08:07.1]
Joe: So like, I'll have an asset that I'm all into for $75,000 that I could put, I'm going to talk about Section 8 for a second - I can put on Section 8 and bring $1200 or $1300 a month on a $75,000 asset. Right? Versus, in order for me to get $1200 or $1300 in the suburbs, I'm going to spend at least, I don't know, close to 200 grand to pull that kind of value. So, it's really opportunity. And then, you know, the folks, with Section 8 Housing, and I'm a big fan of it, people just stay a long time in these houses. My average turn is 5 years on a Section 8 property…
Joe: …you know, in the D-class neighborhood. They stay forever. It's wild.
Jonathan: So you're talking about Section 8, and I've always had a resistance to Section 8 because I feel like the people are not paying for the place, because they're not … they're going to be a pain in the neck. It seems like your experience is totally different. [0:09:04.0]
Joe: Oh, my gosh. That's such a myth. Right? I mean, I kid you not. I have a lot of property, as we talked about, and of all my tenant base, my Section 8 tenants are the only ones that call me Mr. Lieber. I'm not kidding. They're so grateful. They're so happy. Just think for one second, right - if you had a golden ticket in your hand for your mortgage or rent payment getting paid, you wouldn’t want to mess that up, would you?
Joe: No, of course not. And that's what these are - they're little golden coupons, and here in our county, in Cuyahoga county, which is in the Cleveland area, there is a need for landlords to participate in this program, and there's really limited supply. There's more voucher holders than there are landlords participating in the Section 8 program. So, these houses just fly off the market and the tenants are so grateful to get them that when they get into them, they never go anywhere. I mean, they really stay a long time. It's not unusual to have a 10-plus-year tenant in these houses. [0:10:03.1]
Jonathan: Wow. I thought I was doing good. We're like averaging, on all our properties, about 3 years so 10 years sounds a lot sexier to me, yeah.
Joe: It's really good.
Jonathan: So how does a white man end up buying houses in the ghetto?
Joe: Familiarity, man. This is on me. I'm a west side of Cleveland guy. Born and raised, 40 years, and you know, the demographic is not all African-American. You know, there's some mixed neighborhoods and I'm just used to it. It's all I really know and I spend a lot of time down there. Plus it's an easy barrier to entry for new real estate investors. You know, when you can only spend, you know, 20, 30, 40, $50,000 on an asset, it's an easy way to jump in. These things are easy to finance. It's easy to get private money. It's easy to pay cash. It's a great way to really jump in, so. That's what I did. That's how I jumped into this business, you know, 20-plus years ago.
Jonathan: What was it like - how did you grow up, man? [0:10:57.0]
Joe: So, you know, I grew up, dad - factory worker, mom - secretary. You know, I guess you would say Midwestern, you know, not really having nothing, you know. That's okay, though, but you know, that was just it, you know. It was a good childhood, though. I have no complaints.
Jonathan: So how do you get like, because I grew up to working class. My mom was a bank teller. My dad was a construction worker. And they had like a very low threshold of dreams. The way that I was raised was, "After you get out of high school, get a trade, and then you can have something to fall back on if you want to do something else." But you get stuck in that hole - I get a trade and I do this forever. So I mean, how do you rise above that station where you came from and imagine this empire in the ghetto?
Joe: So, what's funny about it is, you know, I did have a lot of support, although my folks really didn’t have nothing nor any real education or anything at all. So I'll tell you a story. So I remember being just a teenager in the mid 90s, sitting at home, late night, and seeing those Carlton Sheets and …[ 0:12:01.0]
Jonathan: No money down.
Joe: Yeah! I remember seeing that stuff, and at 16 and 17 years old, when you see Russ Whitney and them guys standing on a little island behind a boat, you know, they're living this lifestyle and you're like what are these guys talking about. Right? So, I graduated high school June 6, 1997; I'll never forget it. I stood there. My buddy looks over at me. We threw our caps off our heads, and he said what are you going to go do? I'm like, dude, I have no idea. My folks want me to go to Cleveland State University and get a business degree, which I had no interest in doing, you know, because it wasn’t for me. I was a terrible student anyways, and he said to me well hey listen, I got this really good job in construction. And he said, "I'm going to make 20 bucks an hour."
Joe: I'll tell you something - in 1997, 18 years old that was just about all the money in the world.
Jonathan: No kidding.
Joe: I was like, oh my gosh. I'm like, dude you gotta get me a job doing that. Like you gotta get me in. And he didn’t - whether he couldn’t or just didn’t - it never happened. But I did the next best thing. I said hey listen, you're going to have this hefty pay stub. Let's go buy a house, fix it up and flip it. Right? And we'll probably both get a bank loan just for making all this money. So he's like, that sounds good to me. And we did. And a bank gave us a loan, believe it or not, and…[ 0:13:15.8]
Joe: … we buy this home, but that's when the problems start because I didn’t really have the support of my parents and my grandparents were alive at that time, and it's really challenging when you didn’t have all that support. You know, they're like, oh man, this is not going to be good. But you take your lumps, and of course I did, and you go out there and you learn. And I was just never going to give up. Right? This is going to be figured out. I lost money on that first deal, to make a long story short. But I went out there and did it again, and I did it by myself because, to make a long story short, my business partner and I didn’t want to do anymore deals together. And I flipped this house in 1998, made $35,000, which was more money than my mom or dad made an entire year working their jobs. So it became really interesting, and that's when kind of the start of it all happened. [0:14:05.8]
Jonathan: That's incredible. So right out of high school, right out of school, you just got in? I wish I had done that.
Joe: I know. It was tough, you know, but interesting. It was a good ride.
Jonathan: So where did this fortitude come from? You said that you were never going to give up. Most people, if they get in their first deal and lose money, they will never go back, but you said you would never give up. How does that work?
Joe: Well you know, I saw my dad working this job, right. He started at 6:30 in the morning, left everyday at 2:30, in a factory, and I was like, man, I do not want that. I have to figure it out. I have to figure something else out, but I can't do that. And I watched my mom work. You know, she had the "good job," you know, worked in the bank, right, as a secretary and it was clean and not sweaty like his job, but didn’t make any money. And I was like you know, why not me? If everybody else is behind boats and palm trees and living this life, why can't I? Who do I effin know? [0:15:03.1 ]
What do I have to do to do that? And it was a challenge, don’t think it wasn't, you know. I would do things that - I mean, I've been in real estate before Google out and you know, my method of talking to sellers was through a pager, not a cell phone, you know, so it's been a much different business. But I would go to the library, literally, and I would check out books and I would sit there and I would read those because I really wanted to figure it out, more than anything. I wanted to break the cycle of financial poverty in my family.
Jonathan: Alright. So there's two things, two roads, I want to go down there first, the most important one that I think would be most valuable to our listeners is what was money like, what was the idea of money like, in your house, growing up?
Joe: Well there wasn’t much to go around - that's for sure, you know. It was just like a - I didn’t know anything different though, really, you know. It was like that was life, right? Struggling was life. Not going out to dinners was life. [0:15:59.4 ]
Me not having the nicest cars or the best clothes - that was just what it was, and everyone in my circle, though, was the same way. Right? Lived in a B minus, C-class neighborhood, just a working neighborhood, but that was what I knew. You know, I hope I'm answering this stuff right for you.
Jonathan: There is no right answer. Like for us, money was the reason we couldn’t have things, and so for the way I grew up was - we can't do that, we don’t the money. No, we don’t have the money for that. So my programming was so messed up that I thought money was the reason you can't have things. Now, it's like money is the reason you can do everything you want to do, and I had to rewire myself. So how did you rewire yourself? You said you went to the library, checked out books. What else did you do?
Joe: Well you know, I had a mentor, but he wasn’t the most successful mentor, which was probably one of biggest mistakes in business, just to go down this road - I had someone showing me the business, but I was too afraid to spend money on education, which was probably one of my biggest mistakes I ever made in business, and that went on from 1997 all the way until 2011. [0:17:06.3]
Joe: Yeah, all those years. So I self-taught myself all those years, and I did okay. I really did, but I didn’t do great. And for people listening, like that was my biggest mistake. Please, whatever you do, invest in yourself, invest in your education. You know, RE groups and books will take you so far, but when you start paying for mentorship, oh my goodness - doors just really, really, really open. And when I started doing that in 2011, it was a whole new game, whole new game. So grateful that I did that.
Jonathan: Okay. I want to talk about that in a second.
Jonathan: But, I want to go back to something that you said earlier because I think it's funny and I think it's something that we all have in common. You said you were total crap in school.
Jonathan: And then you get out of school, and you start spending time in libraries. How does that work?
Joe: I know. You just want it so bad, you know. You don’t how to get… they teach you these things in school that's, you know, you have to learn this - you're force fed this information and I really, even at a young age, never saw real value in that. [0:18:08.2 ]
I didn’t understand how writing an English paper was going to propel me to be rich, and even as a young kid, I wanted to be rich. I was, I remember the 90s when gold was real cool, and you'd go to the mall and a piercing and get the little Mercedes Benz sign and all that, you know. So I always had this where I wanted this stuff, right, you know. And I just didn’t - I didn't really, as a young boy, understand how is writing a term paper going to get me rich. You know, I wanted to learn things that I wanted to learn, and just by.. yeah, man, school is… just didn’t work out. I was a terrible student. I am so lucky to even graduate with a diploma. I can't believe it. I had to do so many terrible things to be able to graduate, but you know they say… what do they always say? An institution education will make you a living, but a self-education will make you fortune. I always thought about that, and that really hit home to me. I was like, yeah, man, yeah. [0:19:01.0]
Jonathan: I was a straight D student and didn’t even get to walk. I had to go to summer school to get that diploma and get the hell out of there, and I think that's probably…
Joe: Sounds like me.
Jonathan: I think, but - tell me what you think about this. This is my theory, and I'm sharing it with you here, and I don't know if I've ever shared it, but I think that because we were bad students and we were rejecting what they were giving us, they weren't able to program us into the shitty way of thinking that everybody else gets. And that actually meant freedom to us. What do you think about that?
Joe: I agree with you. I agree with you. It's like something that maybe you're wired that way, like you're just not going to accept. I've always been the guy where I've always said when the herd went to the right, I always went left. I don't know why, and I correlate that, as a young kid, to every aspect of my life. Even when my friends in high school would pass a joint around, I was like, eh, you're all smoking a joint - I'm cool. I don’t really want to do that, you know. And it's weird, but I remember these things and you know, it makes you stand out and I just knew that I wanted something different and I'm not going to conform and go to college and get a job and all that stuff. It's like the relentless pursuit of never giving up is really what happened. [0:20:11.8]
Jonathan: Never giving in, either.
Joe: Yeah, exactly.
Jonathan: To what they want.
Joe: Never giving in - yeah, exactly.
Jonathan: They want to crush your dreams, and it's like my dream is not to be you. If that's doing everything right, I don’t want it.
Joe: Yeah, right? And you don’t always know how to articulate that as a 17 or 21 or hell, even a 40-year-old, but you just believe these things and you just got to figure out how to articulate it and do what you want to do.
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Jonathan: So you talked about earlier that the way you grew up, it was normal. I had that too. I didn’t realize that we were like pretty much lower middle class until later one when I started reprogramming myself because I thought, hey, this is the way it is. So how did you start - no, you know what - all those people that you were surrounding yourself with - are you still friends with them, or did you outgrow them? What does that look like?
Joe: So funny. About four, I'll say five years ago now, I had to cut all those ties. [0:22:01.3]
All those high school, I kept them, all those high school friends, you know, I had to cut those ties, man. I just realized that it was not going to make my mindset and take me where I wanted to go. It wasn’t going to happen. I couldn’t continue that and have those same stupid conversations. I don’t care about the Cleveland Browns' record. I don’t know who the quarterback is and it's not going to make me any money, so I don’t want to have that conversation. You know, I don’t want negative things and the president that I can't control. All these things that, you know, what's going on in politics and stuff, I can't control any of that, so I didn’t care. I just want to talk about things that are going to excel me to the next level, because I know where I'm trying to go, and I need to be around the right people to get me there. And that's why I'm in some of the best masterminds in the country right now because I know that's what it's going to take to get me there.
Jonathan: Let's talk about that. So you said that you did the boneheaded route that I think I do for many years too - not investing in myself. And so, where does the light bulb go up and you say, oh shoot, maybe I should get around some better people, and then what's the move that you make to make it happen? [0:23:01.0]
Joe: Alright. So this is where it all changed for me - right around late 2010, early 11, things weren't good in my world. I had about 70, maybe 80 single-family homes. I had mortgages on them all. I'm spending $10,000 a month in general contracting, trying to keep these things going, right.
Joe: And it wasn't good. I'm breaking even, if not losing a few thousand, at best. I'm a real estate broker, so I'm selling real estate at night, trying to make ends meet, basically is what I'm doing. I'm managing my portfolio during the day, running buyers around, taking lists at night, making a living, at best. Okay? So my friends tells me, "Joe, I want to take you down to Florida on my ticket to a Ron Legrand event."
Jonathan: Oh, Ron.
Joe: Ron Legrand. So at that time, it was the week before Thanksgiving, and this might have been 2010, we go to this business management course for seasoned real estate investors. So Ron must have had a bunch of cancellations; only like nine people show up to this event. Right? [0:23:59.8]
So Ron was very cool because it was such a small group. He just ended up talking to us for three days straight, but at nighttime, he would take us to his restaurant called Legrand's. It's in Jacksonville. And we got extra time with Ron, and that, my friend, is where it changed. He said to me, he goes, boy, let me tell you something - if you don’t change this portfolio and start running it like this or running it like that, you're going to lose everything. I listened; I did. And I did what he said. I turned that whole damn thing around, from losing 10, well breaking even, to making about 8 grand a month off that same portfolio, and I couldn’t believe it. For a little investment going on there, and I was forever grateful for Ron. But here's what happened out of that event - I met a guy there who said to me, "I'm involved in this mastermind called Collective Genius." He was like, "You might want to come check this out." I said, "Well, how much is it, Mr. Wayne?" He goes it's 20 grand a year. I said oh hell, no. I spent 500 bucks for an event. There is no way I'm going to spend 20 grand on anything. Right? [0:25:02.4]
And I didn’t. Two more years passed. I'm sitting at my desk, around 2012, having a meltdown. Right? To the point I don’t know what it was now - I was just done, to the point where I was like I'm going to get the hell out of the business. Right? I mean, I was that fed up. Right? And I go through this old book and I find Wayne's number, and I'm like, shit, I'm just going to call Wayne and see what's going on. And forever grateful, to say the least. So glad I did that. And I quickly am learning that people that you meet and put in contact with, these are the things that are game changers. Meeting people like you, we're podcasting, we're educating. Great things come out of that. You learn. You meet new people. And that's what it's all about, man.
Jonathan: So on the second call to Wayne, after all that time, did you join that mastermind?
Joe: So here's what happened - so he goes, Joe, just call Jason. Jason runs the Collective Genius; just give him a call and have a conversation. So I called Jason. He goes, hey, why don't you come down and check this thing out, you know. I'm like, no, man, I don’t want to come. [0:26:01.5]
He goes, why not? I go, because I'm going to want to join, and I can't spend $20,000 on this. So he says something to me that no one has ever said to me before, and I almost got mad. He says to me, hey, quit being a little bitch. Pick up your skirt, grab your balls, and get on an airplane and get down here. I go, woah!! Like I almost like honestly, I almost like snapped. I was like you, you know, call him every name in the book and hang up the phone. Right? I mean, right? I never had anyone talk to me like that before. I couldn’t believe he even said this to me. Instead, I just said, okay.
Jonathan: He called you on your b.s., huh?
Joe: He did. I go, okay. I couldn’t believe it. I didn’t know - I don’t know, I must have been having an out of body experience there for a moment to even just commit like - and I hopped on an airplane and went to Collective Genius. And it changed everything for me.
Jonathan: Let's talk about that a little bit more. So just in case, because I found this in the real world, not in the world where we live, because we're doing this kind of stuff all the time, what is a mastermind? [0:26:59.5]
Joe: A mastermind is a collection of - it's predominantly men who have achieved great success in a specific area of business, and it's a collaboration of all their efforts where you sit, horseshoe style, most of the masterminds I'm involved in are, and it's put on by the members where you go in front of the group and you tell them what you do, and what you are a specialist at, and you tell them where you are having your challenges, and you have some of the best, brightest minds in the entire country giving you feedback. And that is a mastermind format. It's the brightest minds. It's connections. It's knowledge. It's everything.
Jonathan: People pay for this?
Joe: Oh, yeah. I know. That's what I thought the first time. I'm like, why would I do this? There's no headliners. It's brought by the members and it's not cheap. It's ridiculously expensive.
Jonathan: So what was the experience like? You pulled up your skirt, grabbed your sac, hopped on an airplane, and so tell me what the experience was like. [0:27:57.0]
Joe: So I get down there and for the way Jason ran his mastermind at that time is you're together as a group from 7:30 a.m. to 10 p.m. You eat breakfast, lunch and dinner together. You just don’t stop, for three days straight. All the guys at that time in the group were in my age group, between I'll say 35 and 45 years old, so it's like a brotherhood, right. You really get to know guys for three days. So at the end of it, well, you know, oh, we gotta go, and you know, everyone is like hugging it out. We're going to see you again, man, you know. I'm like, shit, yeah, you're going to see me again, as bad as I hate it. Well I'm like in medley and I fricking write him his check and I don’t know what's going to come out of this, but you know, I want to see these guys again. Like a fraternity brother I never had. But here's the cool thing that happened for me. I'm forever grateful for this. I get back to Cleveland. I was down in Tampa Bay. I get back to Cleveland and the very next day, my phone rings and it's one of the guys from the group and they're out of Phoenix, Arizona. He goes, hey, man, what's going on, what's going on? Nothing. He says, remember how you're talking about those houses in Cleveland, those, you know those are some really attractive numbers. [0:28:59.2]
I go yeah, their, it's interesting. He goes, I'm actually down here at Cleveland Hopkins International Airport. Can you come pick me up? I go, yeah, right. He's like, no, I'm here, and I have millions of dollars with me and we're going to buy 100 houses right now. I go, what, you're lying. Drove down to the airport, there he is. There he is. Changed everything, dude. Changed my whole life.
Jonathan: Wow. Wow. That's incredible. So let's talk about this for a second because I have found that the best investment I have ever made is always investing in myself and the best way that I find to invest in myself is putting myself in the right group of people. Because you and I had met through a very high level, very elite mastermind, and that's why we're talking today. So what has being in these environments done for you, growth wise?
Joe: So, you know, big on mindset is cool. But sometimes it's more than mindset. It's operations. Right? So like, I might be having an issue in my business today where I need to turn water on at this property or I got to make sure my admin does this, and I gotta make sure that we sell a house, that the settlement statement is uploaded to the drop box and the utilities are turned off and all that stuff. [0:30:14.4]
So like, someone came to me and said, dude, you've got to check out Asana. What the hell is Asana? It's a free task manager, is what it is. So I implemented that. Right? I never even had heard of before, and that was a big game changer for me, and I would not have heard that unless I was around like-minded guys in a similar situation with a lot of houses, a lot of properties, a big business going on. I wasn’t going to find out that at REA from a guy flipping three houses a year. I had talked to a guy doing 100 deals a year on how you can join all this. So things like that come out of it. Right? How to track your calls, CallRail - I never heard of CallRail, but a guy, you know, one of my masterminds, says if you really want to track this stuff, bro, you gotta get CallRail. So it's things like that - procedures, it's operations, it's mindset - a lot of good stuff comes out of these masterminds. [0:31:06.4]
Jonathan: So here's something that I've found and it's, I have a notorious way of how I handle masterminds. I go in and I don’t say a word because I have found that most of the time, there's guys like you, who are like 10 levels above, doing things I never thought about doing. And hearing the questions that they ask and the way that they think about things has elevated my game, just from hearing them talk. Have you found something similar in your masterminds?
Joe: Absolutely. I mean, you will pick up these things from guys who are doing 10 times the volume you are, and that's what helps you grow and figure out what you really - what do I really want - how do I really want to run my business, and what do I want out of it? Like, let's give an example. So what I really want out of the business, right, and this podcast is, you're talking to dads, right? That's the idea of this?
Jonathan: This is Daddy's Working. I have four like core beliefs or values: Family, faith, fitness and finance, and I think a lot of what we have been talking about is finance and in a weird way, faith, having the faith to invest in yourself and grow, but yeah, definitely. [0:32:08.9]
Joe: But what you don’t see here right now is, I'm at home. I'll try to point the camera around here. I'm in my house right now, and I'm here because I'm a dad. I'm a father of two children, and I choose to take my summers off. I do not work from June 1 to August 23, every year. I put that first. And those are some of the things that are important to me, and I structure my business on how I can make that happen - how am I going to take off my summers to enjoy time with my children. And it's real, real important to me to play it all out, as I like to say. You know, I chose to be a dad; I'm going to play all out. I'm going to do that. I'm going to fulfill my commitment, so to speak, while they're little and yeah, man - that's super important to me. So…
Jonathan: I'm with you, brother. I don’t have the two months off, but we do some fun stuff. So what about this - what about the people out there that think like 20 grand now to me, when you say that, it sounds like chump change, and I'm sure you've invested more in higher level masterminds. What do you say to the people that say, "Why should I have to pay for access?" [0:33:13.0]
Joe: So just say like be blunt, and some might not like this answer, but ballers only want to be around other ballers. If you can't write the check, if you can't run with the big dogs, you've got to stay on the porch with the puppies, man. It's just what it is. You know, I hate to be so blunt about it, but that's what ballers do. They want to be around other people who are doing it, you know. If I can write, you know, you got to write the check if I can write the check, man. It puts you in that category. You're either a baller or you're not. You either got it or you don't, man. Get there.
Jonathan: Right. Do the work to get there.
Joe: Yeah, get your ass up and do it.
Jonathan: My first mastermind that we thought we were going to die on was like a grand a month. It was $12,000, and we were like, "Oh, my god. This is so scary," and like, I still have relationships today, and I think that's one of my favorite parts is when you're getting into the right groups, and that's why we're talking here today, because I put out the call. [0:34:10.3]
I said anybody married, with kids; family, faith, fitness, finance who wants to talk on the show, please reach out so we can have a conversation. I think that, paying for that access, is just like saying, hey - is it not a shortcut? Like, I don't know how else you would meet these people. Like how else would I meet you? There's no way, unless I went to your local REA, and you might not even be there nowadays. How would I meet you? Like, how am I going to meet you?
Joe: You wouldn't. How else are you going to get to the top of the market? How are you going to find the biggest person, with the most units, that does the most amount of volume, with the best mindset? You're not. You gotta put yourself in the situation. I mean, I guess you could try to chase people down at country clubs or something, but you're just going to find out they're a dentist or something, you know. So, if you want something that relates to what you do, you know, real estate, you've got to pay. You've got to write the check, man.
Jonathan: You gotta write the check. I'm going to ask something personal, and you don’t have to share if you don't want. [0:35:01.8]
Joe: I'm pretty open.
Jonathan: But I'll share mine, because I feel, I feel like it's a badge of honor. What's the most you've invested in one mastermind for a year?
Joe: Right now, it's the DM, the DM family. It's 35 grand.
Jonathan: 35 grand?
Jonathan: I hope you guys are listening. This guy, $3000 a month, to be in there. That, before, 20,000 sounded like a lot. Right? And then this is - and how do you feel about that, when you stroke that check, how do you feel about that?
Joe: Well, I feel like this - I stroke multiple checks a year because I'm in three different masterminds, so I spend about $75,000 a year on masterminds right now, plus travel. So I'm dropping 100 g's a year on my education. For education and contacts, it costs me 100 grand a year.
Jonathan: Would you change that? Would you not invest that, if it was an option to still have the success?
Joe: You know, man, there's more to it - you know, the connections and all that is one thing, but also, when I get to step away from my business and just riding on the airplanes out to California or wherever I'm going, I really get to like think about my business. It's like almost time away. Right? Plus you're on the airplane. You can't talk really. You're not doing any business. [0:36:10.3]
Joe: It's almost game changing for me. To be able to have almost like a 30,000 foot view on my business, instead of always being operations, then grinding, like how can I just figure out the who and not the how all the time.
Jonathan: That's beautiful. Yeah, I'm in multiple masterminds. I'm in, well, Strategic Coach, which is about 10 g's a year, and I'm with you and DM. The largest check I ever stroked, and now I'm feeling like, damn, maybe I spent too much, but it was about $47,000.
Jonathan: For one year. Yeah - $47,000.
Joe: Whose group was that?
Jonathan: That was - they're clients of mine, Traffic and Funnels - they used to have, The Smartest Guys in Marketing - they used to have a really high tier. I actually invested about 55,000 total with them, but I wanted their highest tier, because I saw that was where all the ballers were, and I'm sitting here with the chumps who only invested 10 grand. I'm like, no, put me in the room that hurts. Like make it hurt, baby. [0:37:09.0]
Joe: Yes, yes.
Jonathan: Make it hurt. So then when I hear something like DM, I'm like, hell, yeah - to be around these guys? That's nothing.
Jonathan: But I feel like, to me, I feel like doing things like this, and this is something I want to bring to my team as well, is like the fact that like you and me would stroke these checks, and it's not just the money. It's that travel time, being away from your family, being in the room those couple of days, is like showing, living by example, that you want more, and you're willing to do anything it takes to get to that next level. And I think that's, I don’t believe that people will have that kind of commitment, and they can stay working at Starbuck's. But the people that want to achieve will invest in themselves, is the way I feel about it. Not that this is a pitch for DM or anything like that.
Jonathan: Cool. So, Joe, we talked about the ghetto. We talked about getting rid of strawberries. We talked about investing in yourself and masterminds. Is there anything that you wanted to talk about or expected to talk about that maybe we didn’t hit? [0:38:09.6]
Joe: Just I want to add a comment in there. Passive income, man. That's what gives me the ability to be home all summer, what gives me the ability to live the lifestyle I want to live, you know. I love doing some of the things I do and you know, passive income is what really does it for me. I hate being transactional, like setting things up once and getting paid forever or for a long time on them. So, I would tell people out there, if they're out there chasing a dream or a lifestyle or a better life, like, just don’t be too transactional. Make sure that you add some passive income in there.
Jonathan: You know, it's funny that you mention that because I think I heard Mark talking about it yesterday. He's all about like rentals aren't passive income. So how could you say that it's a passive income? Give us a little insight into that. [0:39:01.4]
Joe: Oh no - Mark's right. It is. It is active-passive. Rentals are active-passive. When the minute they become passive-passive and not active-passive, you're going to lose a lot of money. You know, and you really are. I mean when you start turning things over to a management company and letting them make all your decisions for you, you're going to lose money or not get as much money, you know, and it might better to buy a stock, you know, opposed to that. So don’t think it's not. Rental properties are active-passive, if you want to make any money at them at all, but there's more than just cash flow.
Jonathan: But I think the recurring, right, the recurring is - I love getting checks at the first of every month and knowing that I have enough coming in.
Jonathan: That's my favorite part about it, and it's hard for me to think of not being like that. So a question on that, just tactically - like we're looking to ramp up where we're at, and I think that I just need to spend 40 grand or something like that and bring in somebody, train them on my systems, and let it run. Wouldn't that count as passive income, or is it still active-passive, in your book? [0:39:59.7]
Joe: You mean to run your rentals?
Jonathan: Our rentals, on our system, right. Just bring them in, in-house, as our person and just pay them a salary and then they're running it on our system.
Joe: No, you can do that, and I think that's great, and you should. But you will have to watch that individual, you know. You don’t know who they are. You don’t know if they're a trusted person - do they always have your best interest in mind, eh - sometimes they do, especially in the beginning, but you know, as things go on, they think, oh, he's making all the money and blah, blah, blah, he's not paying me enough, and you know. Yeah, you're going to have to keep an eye on it. It's not completely, it's never completely passive. I don’t believe it is.
Jonathan: Ah, crushing my dream!
Joe: Well ,no. It's not that. It's just, you know, it's, you gotta be a little bit realistic.
Joe: Yeah. But you know, I tell you what, Notes is a great way to have passive income. Lending private money is another great passive income that can be a lot of fun. You know, I do a lot of that. I take a lot of private money. I create a lot of mortgage notes. I sell a lot of mortgage notes. There's a lot of cool things out there besides just owning hard assets like that. So, keep in mind. [0:41:02.3]
Jonathan: Yeah, yeah. Cool. So when our listeners want to know more about the ghettologist, where should they go?
Joe: So you can check me out on the web. I'm at ClevelandInvestor.com. You know, if you want to have a conversation, just call me. I'm a pretty easy guy to get a hold of, man. I'm not - you're not going to get call screens and all that stuff. My office phone number is (440)387-4800. I'm right at extension 2. Or hit me up on email; send me an email - email@example.com.
Jonathan: There you go - every way to get in touch with the ghettologist. Man, Joe, I had a lot of fun with this, and thank you for being an open book, and thank you for being a sport because I knew that this strawberry thing was going to throw you off in the beginning.
Joe: Oh yeah!
Jonathan: I hope I didn’t offend or insult anybody.
Joe: Right. Private conversation, private conversation!
Jonathan: Good, good, good, man. Thank you so much. It has been a pleasure speaking with you. Thanks, buddy.
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